A node between the physical and digital.
The rants and raves of Simon Wardley."I like ducks, they're fowl but not through choice"

Wednesday, November 28, 2012

Competition, Strategy and Execution ... an OCI question.

I was asked a question recently, why did the OCI (Open Cloud Initiative) not demand an open source reference model? The answer is ... it does.

What OCI doesn't demand is all implementations of a "standard" have to be open sourced, it allows for operational improvements and hence service competition between providers. For example, I take an open source model for IaaS and make it work better somehow for my own IaaS and decide to keep those improvements proprietary.

Such competition based upon operational efficiency (as opposed to feature differentiation) is fine in a utility market, in fact it's even highly desirable in terms of reducing the probability of common failures. However, the market needs to ensure that semantic interoperability (a necessity for switching) between the providers is maintained. For this you need an assurance mechanism around a core model.

If the core model is open (i.e. the open version is a full, faithful and interoperable reference model) and the assurance system is built around this then you should get a free market (as in unconstrained). This is in contrast to a captured market which is based upon a proprietary reference model and hence is under the influence of a single vendor.

For example, take Cloud Foundry which provides an open source PaaS which is implemented by a number of providers. This is on the way to creating a competitive free market of providers based around an open source reference model. However, you still need a mechanism of assurance that semantic interoperability is maintained (i.e. innovation is constrained in some manner to operational improvements rather than differentiation which itself limits switching between providers). Hence things like CloudFoundry Core, which provides such an assurance mechanism are critically important to the game.

Alas, knowing how to play the game (e.g. create a market based on an open reference model, allow operational competition and create assurance) is merely necessary but not sufficient to create a functioning market. There's also the thorny issue of execution.

Whereas commoditisation is a consequence of competitive action (user and supply competition) of ALL actors and does not depend upon the execution of specific actors, the questions of centralisation (few players) or decentralisation (a broad market) is commonly a consequence of the play BETWEEN actors and it does depend upon execution by those different actors.

Hence whilst, OCI embodies the principles of creating an unconstrained competitive market based on an open source reference model with operational competition between the players - that's only part of the battle. Whether such a competitive market will actually form or instead a more centralised environment emerges which does not espouse any of the OCI values depends upon how well the game is played.

In other words, any strategy or principle no matter how good or benign becomes relatively meaningless without good execution and good game play.